Judge Rejects MWD Stand on Aqueduct Fees

Courts: He backs smaller agencies that want to pay less to transport their Colorado River water for sale to other groups.

In a blow to the historic dominance of the Metropolitan Water District of Southern California over regional water matters, a judge Tuesday rejected the mega-agency's concept of what is fair compensation for use of its Colorado River Aqueduct.

The decision by San Francisco Superior Court Judge Laurence Kay represented a victory over the MWD by the San Diego County Water Authority, the Imperial Irrigation District, two Native American tribes along the Colorado River and a coalition of environmental groups.

The ruling could lead to a wide-open market in which water-rich agricultural and rural agencies sell the resource directly to more populous regions by using the 242-mile aqueduct built in the 1930s.

The MWD, which supplies water to 16 million people in six Southern California counties, has asserted that under a state law encouraging water transfers it could include in its charge for using the aqueduct a portion of the overall cost of maintaining its complex water delivery system.

Anticipating that the age of transfers is rapidly approaching, the MWD brought the lawsuit seeking validation of its views.

But other agencies opposed the suit, arguing that the MWD was trying to maintain its hegemony over Colorado River water by pushing the cost of using the aqueduct so high that transfers would be uneconomical.

The opposing lawyers argued that the MWD should be allowed only to charge the actual cost of transporting water through the aqueduct--not, for example, including the cost of bringing State Water Project water from Northern California.

Kay sided against the MWD and with the opponents' concept of the charges.

The MWD had argued that letting some groups buy water from the Colorado River without paying their share of the regional system's full cost was unfair to other agencies and was akin to allowing some homeowners to pay only for the cop patrolling their block and not for the overall police department.

Kay sympathized with that view but said his role was to decide what lawmakers had in mind in passing the 1986 law encouraging water transfers and not whether the legislation was equitable.

"While [the MWD position] may not be unreasonable," Kay ruled, "it is not in conformance with the limitation contained" in the 1986 law.

MWD officials, stunned by the sweep of the judge's ruling, said they will not decide whether to appeal until a study can be conducted on the decision's economic impact.

Of particular interest will be whether the prospect of curtailed revenues will hurt the huge agency's ability to sell bonds for large projects.

Paul Cunningham, MWD advisor and lawyer, said the ruling's effect "on water transfer policies could be very substantial" and lead to other agencies seeking such private purchase deals using the MWD's facilities.

Kay's decision is particularly good news for the Quechan and Chemehuevi tribes along the Colorado.

Both have allotments of the river's water that they would like to sell to agencies along the coast to help the tribes avoid dependence on casino gambling, government subsidies and the vagaries of desert agriculture.

Lawyers for both tribes had said that under the MWD's proposed fee schedule neither would be able to find a buyer for its water.

The so-called "point-to-point" cost formula advocated by the MWD's opponents would result in a charge for using the aqueduct that is less than half that suggested by the giant agency. However, the foes did not present as part of their case the exact charges that they think are fair.

The MWD position had also been attacked by the Environmental Defense Fund, a coalition of groups. The fund believes that new transfers are the best way for California to make more efficient use of its Colorado River water.

The MWD is now negotiating with San Diego County officials over their desire to buy up to 300,000 acre-feet a year--enough for 2.4 million people--from the water-rich Imperial district and ship it to San Diego via the Colorado River Aqueduct.

Kay's decision will probably not have a direct impact on those negotiations because the MWD--under pressure from Gov. Pete Wilson and the director of the state Department of Water Resources--has abandoned its stance that anything less than full cost recovery is unacceptable. When the lawsuit began, however, the MWD was still maintaining that position with San Diego County.

A San Francisco judge heard the suit because neither side wanted a decision from a jurist whose territory included any of the involved water districts.